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24 Jan 2024

Meridiam and Rift Valley Energy – transforming the Tanzanian power mix

Meridiam and Rift Valley Energy – transforming the Tanzanian power mix

In July 2023, Meridiam announced its acquisition of Rift Valley Energy (RVE), in a move set to grow its renewable energy portfolio and support rural electrification in southern Tanzania.

With both companies speaking at the 5th Tanzania Energy Cooperation Summit (TECS24), EnergyNet caught up with Michael Gratwicke, CEO of RVE, and Matthieu Odoux, Senior Associate at Meridiam.

As background, Meridiam is one of the largest infrastructure investors in Africa, with a strong focus on green-field project development, and an emphasis on providing governments with tailor-made solutions to meet their needs.

With the acquisition of RVE, Meridiam is now a significant investor in rural electrification in Tanzania, owning the only private distribution license in the country, which serves more than 7,800 households.

This platform supplies 100% renewable energy to all the businesses, schools, and hospitals it supports. Tariffs match those of the national grid, with highly discounted tariffs for rural households with low monthly consumption.

The impact on the social and economic development of Tanzania is huge.

RVE’s customer connections are each 'grid quality', and the supply connection is completely unconstrained – so people can use as much energy as they want.

Even if customers increased their average electricity consumption by 10 times, this would still be significantly less than European average consumption –  and this future growth in customer demand is always planned for from the outset.

This is in contrast to most other mini-grids which usually only offer a limited supply capacity of electricity to their customers, often at an inflated prices.

Aside from the geographical bounds of the distribution lines, there are no limits.

And RVE encourages conversations about energy.

As Mike puts it; “If you are a small business and want to open (say) a bakery, come and talk to us. Ask for a connection and a discounted fee. We can even help you put a deposit on your bakery oven.”

"Direct customers aside, RVE’s generation is all located at 'end of grid' locations, providing valuable voltage support to the long TANESCO lines that we are connected to."

Any surplus electricity generated by RVE’s operations is sold to TANESCO – a win-win solution for both the utility and the people it serves.

With two operating hydroelectric plants in the Southern Highlands of Tanzania and two hydropower projects under construction, RVE also constructed the first wind farm in Tanzania, specifically to ensure it would have enough renewable power for customers, even during the dry season when hydro generation drops off considerably (which is also when the wind typically blows hardest).  

Meridiam’s robust track record in developing, financing, and managing energy infrastructure, coupled with Tanzania’s ambitious development plan for its energy sector and a strong focus on renewables and rural electrification makes for a powerful mix.

The acquisition of RVE was made with the clear ambition to progressively expand its generation capacity, with additional small renewable energy generation assets developed under the SPPA framework.

The two additional plants will grow the platform from 7.5 to 14 MW, and a pipeline is being developed to reach a total of 30 MW of installed capacity within the next couple of years.

Both Meridiam and RVE attended TECS in 2023, although in different delegations, and are looking forward to discussions in Arusha.

“This summit will be the ideal opportunity to engage directly with public stakeholders, to understand what the country needs from international investors to support the development of the sector, and to better appreciate the initiatives of the government,” commented Matthieu.

“We always want to know what the country needs – we can’t take it for granted.”

Over the past five years, Meridiam has developed projects in hydro, solar, biomass and geothermal energy across Africa.

More globally, Meridiam is an investor in large energy transmission and distribution assets too. The company’s long-term investment approach is also highly valued, particularly by public authorities and stakeholders in the continent.

“We believe there can be a clear alignment between our recent track record, and what can support Tanzania in achieving its renewable energy generation goals and power mix targets.”  


Hear from RVE and Meridiam at TECS24:

Michael Gratwicke will be speaking in the Interactive Boardroom: Concessional Blended Finance for Sustainable Project Development

Marvin Bell, Meridiam’s East Africa Director, will be speaking in the Interactive Boardroom: Bringing Tanzania’s Renewable Energy Projects to Financial Close